LI developers win bid for 633 acres in Calverton

By: David WinzelbergSeptember 1, 2016Comments Off on LI developers win bid for 633 acres in Calverton

The Riverhead Town Board approved the sale of about 633 acres of town-owned property in Calverton Thursday to a Long Island developer to build a massive new industrial park.

Melville-based Suffolk County Industrial LLC, a company owned by developers Tod Buckvar and Mark Fischl, was one of two finalists vying to purchase the land within the town’s Enterprise Park at Calverton, which Riverhead has recently subdivided. The other bidder was East Rutherford, N.J.-based Lincoln Equities. The town board selected Buckvar and Fischl as master developer for the site in a work-session at Riverhead Town Hall on Thursday morning. The final price was $45.6 million, or $72,000 per acre.

The company, which is also building an industrial complex at the former Entemanns property in Bay Shore, is already working on deals to sell industrial parcels at the Calverton site to end users according to brokers.

The town had hired brokerage firm Cushman & Wakefield last year to market the Calverton property. C&W brokers said they fielded interest from several developers before the field narrowed to the two prospective buyers. The multi-use development of the property will include industrial and office space, along with service retail and likely some employee housing.

The plan to create a new industrial park at EPCAL is the latest in a series of proposals that have been entertained to derive mandated economic development at the site once used by the U.S. Navy and Northrop Grumman for testing F14s and other military aircraft.

It’s been 18 years since the town took title to the 2,900-acre property. Some 1,900 acres of it has been preserved as open space and to protect the region’s environmental health. That’s because EPCAL is at the western end of the Peconic Estuary System, one of 28 estuaries in the National Estuary Program administered by the U.S. Environmental Protection Agency, and named an “Estuary of National Significance” in 1992.

The first attempt at developing acreage in Calverton has been fairly successful. In 2001, Garden City-based Engel Burman acquired 500 acres on the eastern end of EPCAL and has since sold most of it to end-users who’ve built more than 2 million square feet of industrial buildings there. But most of the portion tabbed for development has since languished, a victim of ill-fated projects.

In 2008, Riverhead Resorts, a consortium headed by a residential developer from Scotland, couldn’t secure financing for its $108 million acquisition of 750 EPCAL acres and had to ditch its plan to build a recreation and entertainment resort featuring an indoor ski mountain.

The town had chosen the Riverhead Resorts proposal over a $1 billion motorsports-themed plan that would have developed a pair of racetracks, an equestrian center and timeshare living units.

In another setback in 2011, Rechler Equity Partners pulled out of its deal to pay $18 million for 300 acres where it first wanted to build an industrial park and then a mixed-use community with more than 900 residences.

Soon after, a group of Argentine investors known as International Polo Development wanted to pony up as much as $75 million to build up to six polo fields, stables, a 10,000-seat stadium, shops, restaurants and a polo museum on the site and offered $50,000 an acre, but the plan couldn’t win the favor of the town board.

The EPCAL misfires prompted the town to go back to basics with its latest industrial park subdivision plan for which it devised a flexible form-based zoning code.

“We’ve basically created the second Hauppauge Industrial Park on Long Island,” said Riverhead Supervisor Sean Walter, who helped guide the creation of the Calverton subdivision plan over the last couple of years. “We want to make sure we do it right.”

Infrastructure improvements at EPCAL have been paving the way for the new industrial park. In 2010, $3.5 million in federal funding helped restore a short rail line connecting part of the Calverton site with the Long Island Rail Road main line. In 2014, Riverhead got more than $6 million in state funds for upgrades to the sewer plant at EPCAL so it can support future development. The new sewer system’s total cost was pegged at about $23 million.

“There is an active airstrip, freight rail and sewers, and its now tied into a master developer to add roads and other infrastructure,” said C&W’s David Pennetta. “The property from this point forward is available for companies to relocate there.”

Pennetta, along with C&W colleagues David Madigan and Kyle Burkhardt, represented Riverhead in the deal.

While building such a big industrial park so far east may have been a tough sell years ago, the Island’s current lack of available industrial space and tight market may make the EPCAL project more viable now.

“There’s a market for people that want to be out east,” said Gerald Wolkoff, who began developing the 400-acre Heartland industrial park in Edgewood more than 30 years ago. “It’s still quite a trip from Queens, Brooklyn and Nassau, so I don’t think it’s a big market. But anything that creates jobs for Long Island is a good thing.”